The Bhutan Electric Vehicle Initiative

The Bhutan Electric Vehicle Initiativesilpakulchorn
The Bhutan Electric Vehicle Initiative Scenarios, Implications, and Economic Impact
Da Zhu, Dominic Pasquale Patella, Roland Steinmetz, and Pajnapa Peamsilpakulchorn
D I R E C T I O N S I N D E V E L O P M E N T Infrastructure
The Bhutan Electric Vehicle Initiative
The Bhutan Electric Vehicle Initiative Scenarios, Implications, and Economic Impact
Da Zhu, Dominic Pasquale Patella, Roland Steinmetz, and Pajnapa Peamsilpakulchorn
D i r e c t i o n s i n D e v e l o p m e n t Infrastructure
The Bhutan Electric Vehicle Initiative • http://dx.doi.org/10.1596/978-1-4648-0741-1
© 2016 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org
Some rights reserved
1 2 3 4 19 18 17 16
This work is a product of the staff of The World Bank with external contributions. The findings, interpreta- tions, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries.
Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved.
Rights and Permissions
This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) http:// creativecommons.org/licenses/by/3.0/igo. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions:
Attribution—Please cite the work as follows: Zhu, Da, Dominic Pasquale Patella, Roland Steinmetz, and Pajnapa Peamsilpakulchorn. 2016. The Bhutan Electric Vehicle Initiative: Scenarios, Implications, and Economic Impact. Directions in Development. Washington, DC: World Bank. doi:10.1596 /978-1-4648-0741-1. License: Creative Commons Attribution CC BY 3.0 IGO
Translations—If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank shall not be liable for any content or error in this translation.
Adaptations—If you create an adaptation of this work, please add the following disclaimer along with the attribution: This is an adaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsed by The World Bank.
Third-party content—The World Bank does not necessarily own each component of the content contained within the work. The World Bank therefore does not warrant that the use of any third- party–owned individual component or part contained in the work will not infringe on the rights of those third parties. The risk of claims resulting from such infringement rests solely with you. If you wish to reuse a component of the work, it is your responsibility to determine whether permission is needed for that reuse and to obtain permission from the copyright owner. Examples of components can include, but are not limited to, tables, figures, or images.
All queries on rights and licenses should be addressed to the Publishing and Knowledge Division, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights @ worldbank.org.
ISBN (paper): 978-1-4648-0741-1 ISBN (electronic): 978-1-4648-0755-8 DOI: 10.1596/978-1-4648-0741-1
Cover photo: © Roland Steinmetz. Used with the permission of Roland Steinmetz. Further permission required for reuse. Cover design: Naylor Design.
Library of Congress Cataloging-in-Publication Data has been requested.
Contents
Preface xiii Acknowledgments xv Executive Summary xvii Abbreviations xxxiii
Chapter 1 Introduction 1 The Bhutan Electric Vehicle Initiative in Context 1
Chapter 2 Background 5 Key Messages 5 Bhutan’s Macroeconomic Situation, Development
Objectives, and Key Sectors 5 Global EV Initiatives and the Context of the Bhutan
EV Initiative 7 Notes 8 References 8
Chapter 3 Scenarios for Electric Vehicle Uptake in Bhutan 9 Key Messages 9 Global EV Penetration 9 Influencing Factors for EV Adoption 10 Potential Market Segments in Bhutan 13 Three Scenarios for EV Uptake in Bhutan 16 Notes 19 References 19
Chapter 4 Electric Vehicle Market and Technology Development 21 Key Messages 21 Global EV Market Development 21 Types of EVs: Plug-In Hybrids and Full Electric Vehicles 23 Factors Influencing Driving Range 24 An “Average Ride” in Bhutan 28 International User Experience with EVs 29
The Bhutan Electric Vehicle Initiative • http://dx.doi.org/10.1596/978-1-4648-0741-1
Battery Performance and Battery Second Life 32 Notes 36 References 37
Chapter 5 Fiscal and Economic Incentives 39 Key Messages 39 International Experience with Incentive Programs 39 Analysis of Incentives and Total Cost of Ownership
in Bhutan 42 Notes 56 References 56
Chapter 6 Charging Infrastructure and Network Planning 57 Key Messages 57 Importance of Charging Infrastructure 58 Types of EV Charging and Available Standards 59 EV Charging Options in Bhutan 63 Charging Infrastructure Requirements by Uptake
Scenario and National Rollout 81 Market Models for Ownership and Operation of
Charging Infrastructure 87 Costs and Financing Arrangements 93 Grid Impact and Power Quality 95 Notes 105 References 105
Chapter 7 Policy and Economic Analysis 107 Key Messages 107 Overview of the Policy and Economic Analysis 108 EV Program Investment Requirements 108 Fiscal Impact 110 Fuel Import Benefits 113 Impact on Trade Balance 116 Environmental Benefits 121 Note 124 References 124
Chapter 8 Stakeholders and Public Transport 125 Key Messages 125 Stakeholder Analysis 125 EV in a Broader Context: The Role of Public
Transport in Green Mobility 133 Note 135 Reference 135
The Bhutan Electric Vehicle Initiative • http://dx.doi.org/10.1596/978-1-4648-0741-1
Appendix A Background Information on Urban Transport in Bhutan 137 Bus Services and Taxi Use 137 Private Cars 137
Appendix B Examples of International Incentive Programs 141 China 141 Japan 141 Norway 142 The United Kingdom 142 The United States 143
Appendix C Total Cost of Ownership Analysis for Bhutan 145 Introduction to the Total Cost of Ownership Analysis 145 Assumptions for the TCO Analysis 145 Results of TCO Analysis for Private Vehicles 145 Scenario Analysis for Setting Incentives—Private Vehicles 145 Results of TCO Analysis for Taxis 152 Results of TCO Analysis for Government Fleet 153
Appendix D Suppliers of CHAdeMO (CCS/AC) Fast Charging Equipment 155
Appendix E Possible Location of Charging Stations in Thimphu 157
Appendix F Comparison of Bus Transport Technologies 161 International Experience and Best Practice 161 Bus Transport Total Cost of Ownership 163 Life Cycle Analysis Carbon Dioxide Emissions 165 Notes 167
Boxes 3.1 First Assessment: EV Awareness 12 3.2 First Assessment: Government Fleet as a Target Group 15 3.3 First Assessment: Target Group Private Vehicles 15 3.4 First Assessment: Taxi Vehicles as a Target Group 16 4.1 Case Study: Experiences with EV Taxis in the Netherlands 31 5.1 Norway’s Fiscal and Economic Incentive Programs 44 5.2 TCO and Incentives in Other Countries 47 6.1 First Assessment: Charging Standards 63 6.2 First Assessment: Charging at Reserved Private Parking 68 6.3 First Assessment: Reserved Private Parking and Separate
BPC Grid Connection 69 6.4 First Assessment: Reserved Public Parking with Extended
Private Charging 71
The Bhutan Electric Vehicle Initiative • http://dx.doi.org/10.1596/978-1-4648-0741-1
6.5 General Requirements for Public Charging Stations 73 6.6 First Assessment: Public On-Street Parking and Slow Charging 74 6.7 Case Study: Public Charging in the Netherlands 74 6.8 First Assessment: Public Slow Charging 76 6.9 Technical Requirements for Fast Charging 77 6.10 First Assessment: Fast Charging 78 6.11 General Assumptions for the Calculation of Charging
Infrastructure Requirements 82 6.12 Operations of a Charging Operator Back Office 90 6.13 First Assessment: Selecting a Charging Infrastructure Operator 92 6.14 Cost Assumptions for Charging Equipment 93 6.15 First Assessment: Grid Impact 97 6.16 First Assessment: Energy Use and Impact on the Grid 102 8.1 Who Are the EV Buyers in Bhutan? 129 8.2 Areas for Improvement of Thimphu Bus Services 135
Figures 3.1 EV Sales Volume and Share of Total Vehicle Sales in
Top Ten of Leading EV Markets, 2012 10 3.2 Motivation for Electric Vehicle Purchases in California 13 3.3 Number of Electric Vehicles for the Three Uptake Scenarios,
2015–2020 19 4.1 Electric Vehicle Uptake Worldwide 22 4.2 Diffusion of Innovations Curve 22 4.3 Electric Vehicle Market Share per Country 23 4.4 Factors Influencing Electric Vehicle Power Consumption 25 4.5 Nissan Leaf: Range vs. Temperature 26 4.6 Tesla: Range vs. Speed 27 4.7 Nissan Leaf: Range Predictor 28 4.8 Elevation Profile of the Route Thimphu–Phuentsholing 28 4.9 Number of Journeys and Average Distance 29 4.10 Charging Locations Used in the Switch EV Trial 30 4.11 High-Level Composition of Battery 33 4.12 Battery Composition of a Lithium Iron Phosphate Battery
(LFP Battery) 34 5.1 Fiscal Incentives and Electric Vehicle Penetration Rate,
Selected Countries 41 5.2 Market Growth Rate vs. Per-Vehicle Incentive for
Renault Zoe Battery Electric Vehicle, Private and Company Cars, 2012–2013 41
5.3 Disadvantages of an Electric Vehicle Identified by Different Groups of EV Owners in Norway 43
5.4 Combined Public Spending on Electric Vehicles in 15 Countries with EV Initiatives 43
The Bhutan Electric Vehicle Initiative • http://dx.doi.org/10.1596/978-1-4648-0741-1
5.5 Total Fiscal Support for Electric Vehicle Incentives in Norway 44 B5.1.1 Economic Incentives for Electric Vehicle Owners in Norway 45 B5.2.1 TCO for Mitsubishi i-MiEV (EV) vs. Fiat 500 (ICE), 2012
Pricing, Comparing Norway, Sweden, and Denmark 48 B5.2.2 Evaluation of TCO for France, Germany, and Norway 48 B5.2.3 Summary of TCO Calculations for Renault Clio vs. Renault
Zoe (Private Car Market) 49 5.6 Savings for Private Vehicles when Switching to EVs, Annual
Fuel Price Increase of 7 Percent at Different Discount Rates 51 5.7 Savings for Private Vehicles when Switching to EV, Annual
Fuel Price Increase of 1 Percent at Different Discount Rates 52 5.8 Savings for Taxis using Various EV Options, Annual Fuel Price
Increase of 7 Percent at Different Discount Rates 53 5.9 Savings for Taxis using Various EV Options, Annual Fuel Price
Increase of 1 Percent at Different Discount Rates 54 6.1 Correlation between Number of Charging Stations and EV
Uptake per Country 58 6.2 Illustration of Extended Private Charging in Public Space 69 6.3 Parties Involved in Public Charging 72 B6.7.1 Development of Public Investments in the Netherlands 75 6.4 Indicative Plan and Timetable for the Realization of the
Charging Network 85 6.5 Integrated Infrastructure Model 87 6.6 Independent e-Mobility Model 88 B6.12.1 Screenshot of Back Office Charging Operator 90 6.7 Histogram of the Ratio between Expected Annual Peak Load
of a Subnetwork and the Peak Load Limit of the Network 97 6.8 Typical Morning and Evening Peak Load on the Electricity
Grid in Bhutan 98 6.9 Daily Electricity Use Pattern (Load Profile), 2010 98 6.10 Time and Distance Distribution for Average Travel 99 6.11 Typical Charging Profile at E-laad Public Charging Operator 99 6.12 DC Fast Charging Connection Time by Hour of the
Day, by Region 100 6.13 Communication Structure for Smart EV Charging 104 6.14 Vehicle-to-Home Smart Grid 105 7.1 EV Purchases and Investment in Charging Infrastructure
by Scenario, 2015–2020 (million Nu) 109 7.2 Private and Public Contribution by Scenario, 2015–2020
(million Nu) 109 7.3 Percentage Growth in Number of Vehicles, Fuel Imports,
and Total Imports, 2003–2012 113 7.4 Fuel and Vehicle Imports in 2011 114 7.5 Fuel, Diesel, and Petro Imports by Value,
2009–2012 (% Growth) 114
The Bhutan Electric Vehicle Initiative • http://dx.doi.org/10.1596/978-1-4648-0741-1
7.6 Fuel, Diesel, and Petro Imports by Volume, 2009–2012 (% Growth) 115
7.7 Avoided Fuel Import by Scenario, 2015–2027 116 7.8 Bhutan’s Balance of Payments 117 7.9 Incremental Impact on Imports, 2015–2027 118 7.10 Net Incremental Impact on Imports by Scenario in Value 119 7.11 Net Incremental Impact on Imports by Scenario as
Percentage of Future Imports Projection 120 7.12 Net Incremental Impact on Imports for Private Vehicles,
Taxis, and Government Fleet, High EV Uptake Scenario 120 7.13 Accumulated Avoided GHG Emissions by Scenario,
2015–2027 122 7.14 Accumulated Avoided GHG Emission from Private Vehicles,
Taxis, and Government Fleet in High EV Uptake Scenario, 2015–2027 123
8.1 Share of Mean Monthly Per Capita Household Transport and Communication Expenses of Total Per Capita Household Nonfood Consumption by Quintile in Urban Area 132
A.1 Bhutan Urban Population 138 A.2 Motor Vehicle Ownership in Bhutan 138 A.3 Vehicle Registration in Bhutan, 1997–2013 139 C.1 TCO Comparison 151 C.2 Upfront Cost Comparison 151 C.3 TCO Comparison of ICE and EV for Taxis, Annual Fuel
Price Increase at 7% 152 C.4 TCO Comparison of ICE and EV for Taxis, Annual Fuel
Price Increase at 1% 153 F.1 Bus Transport Total Cost of Ownership per Kilometer for
Different Technologies 165 F.2 Life Cycle Analysis Results: Annual CO2 Emissions per
Bus for Different Technologies 166
maps 6.1 Draft BPC Plan for 46 Fast Chargers and
Possible Phased Rollout 77 E.1 Possible Charging Locations in Thimphu Thromde 158
photos 6.1 Examples of Charging Stations 62 6.2 Private Charging Station with Socket for EV Plug 65 6.3 Outdoor Charging Socket at Clearly Indicated EV
Parking Space 66 6.4 Possible Private Parking Location at an Apartment 67 6.5 Example of Reserved Parking Place for EV Charging 68
The Bhutan Electric Vehicle Initiative • http://dx.doi.org/10.1596/978-1-4648-0741-1
6.6 Extended Private Charging Station with Two Sockets 71 6.7 Network of Charging Poles with 4 Sockets Connected to
a Central Charging Hub 72 6.8 Examples of Taxi Stands Not Suitable for a Charging Location
Because of Lack of Space 80 6.9 Example of Possible Charging Location for Taxis in Thimphu
with Sufficient Space and Bhutan Power Corporation Connection 80
tables ES.1 Summary of Key Assumptions of Each EV Scenario and
Estimates of Public Support Required during 2015–2020 xxv ES.2 Summary of Policy and Fiscal Impact in Three Scenarios xxix 3.1 Estimated Total Number of Vehicles in Bhutan, by
Target Group 17 3.2 Number of Electric Vehicles by 2020, Low EV
Uptake Scenario 18 3.3 Number of Electric Vehicles by 2020, High EV Uptake
Scenario 18 3.4 Number of Electric Vehicles by 2020, Super High EV
Uptake Scenario 18 4.1 Battery Capacity and Range of Selected Electric Vehicles 25 4.2 Original Equipment Manufacturer Battery Warranties 35 5.1 Financial and Nonfinancial Incentives 40 B5.1.1 Economic Incentives for Electric Vehicles and Resulting
Costs for EVs vs. Petrol Cars in Norway 45 5.2 Current Fiscal Incentives for Electric Vehicles—Taxes on
Selected Vehicles Used in the Analysis 50 5.3 Required Levels of Additional Cost Subsidy to Achieve High
and Super High Uptake Scenarios 54 6.1 Types of EV Charging Based on Location and Type 59 6.2 Types of Charging and Charging Speeds 60 6.3 International Standards for Plugs and Sockets for Normal
and Fast Charging 61 6.4 Charging Modes 62 6.5 Low EV Uptake Scenario: Estimated Number of Chargers
Required by 2020 83 6.6 High EV Uptake Scenario: Estimated Number of Chargers
Required by 2020 84 6.7 Super High EV Uptake Scenario: Estimated Number of
Chargers Required by 2020 86 6.8 Advantages and Disadvantages of the Two Market Models 88 6.9 International Market Models 89 B6.14.1 Cost Assumptions for Charging Equipment 93
The Bhutan Electric Vehicle Initiative • http://dx.doi.org/10.1596/978-1-4648-0741-1
6.10 Indicative Cost per Scenario 94 6.11 Low EV Uptake Scenario: Total Energy Use and Maximum
Peak Load in 2020 101 6.12 High EV Uptake Scenario: Total Energy Use and Maximum
Peak Load in 2020 101 6.13 Super High EV Uptake Scenario: Total Energy Use and
Maximum Peak Load in 2020 101 7.1 Overview of Private and Public Investments and Spending
for the EV Initiative 108 7.2 Investment Requirement of EV Program in Three EV Scenarios,
2015–2020 109 7.3 Estimated Total Fiscal Impact from Incentives by Scenario,
2015–2020 111 7.4 Total Public Investment by Scenario, 2015–2020 111 7.5 External Trade in Million Nu 117 7.6 Total Impact of Imports from the EV Program, 2015–2020
(Million Nu and Percentage of 2012 Imports) 118 7.7 Avoided GHG Emissions by Scenario (tCO2e) 122 7.8 Social Values of Avoided GHG Emissions in Different
EV Scenarios 123 8.1 Initial Assessment of Stakeholder Impact 126 8.2 Estimated Annual and Monthly Fuel Expenses for ICE and
Electric Vehicles 127 8.3 Summary of Potential Beneficiaries and Benefits 128 8.4 Distribution of Households That Own Transport Assets by
Per Capita Consumption Quintile (Percentage) 130 8.5 Annual Household Income Distribution 130 8.6 Estimates of Household Affordability for EV Purchase 130 8.7 Mean Monthly Per Capita Household Food and Nonfood
Expenditure by Per Capita Household Consumption Quintile in the Urban Area (Nu) 131
8.8 Estimates of Public Benefits and Costs 133 A.1 Composition of the Vehicle Fleet in Bhutan 139 B.1 EV Incentive Programs in China, India, Japan, the United
Kingdom, and the United States (2014) 142 C.1 Assumptions for the TCO Analysis for Private Vehicles 146 C.2 Assumptions for the TCO Analysis for Taxis 147 C.3 Assumptions for the TCO Analysis for Government Vehicles 148 C.4 TCO and Switching Values—Private Vehicles 150 C.5 Cost Comparison of EV and ICE Vehicle (%) at 10%
Discount Rate 151 D.1 List of Suppliers for CHAdeMO Fast Charging Equipment 155 F.1 Pros and Cons of Various Bus Technologies 163 F.2 Bus Transport TCO Assumptions and Results 164 F.3 Life Cycle Analysis Assumptions and Results 166
Preface
As the world is facing greater climate risk, there is a call for countries to take more timely actions to cut emissions. In the transport and urban sectors, low- or zero-emission technology and innovation that occur at a more rapid pace offer interesting potentials for countries to achieve economic and environmental objectives. While new technology adoption is traditionally viewed as a matter of private individual choice or consumer preference, today new technology and innovation are increasingly adopted in public policy agenda by governments to actively address sustainable development challenges.
The electric vehicle (EV) is one of the new technologies that has garnered attention in developed countries, and increasingly in developing countries, as one of the key green low-carbon urban mobility options. Although EV technology and market penetration are developing rapidly, EVs are still in a nascent stage. The technical, financial, and economic viability of EVs largely depends on vari- ous factors that are contingent on different contexts in which the technology is being introduced.
Bhutan is a country on a remarkable growth path. The country is also unique with its globally renowned commitment to a development philosophy that puts the importance of the environment on an equal footing with economic prosperity. Driven by hydropower development, electricity sales revenue, and a growing tour- ism sector, the country is growing at an impressive rate—between 7 and 8 percent for the past five years. Economic growth and rapid urbanization steadily increase demand for urban transport and imported fuels, but also further worsen the already large and growing trade and fuel deficit as well as raise concern over energy secu- rity. Addressing fuel dependency and promoting clean environment by increasing reliance on domestic clean hydropower is the country’s development strategy.
In this context, the Royal Government of Bhutan (RGoB) has launched an ambitious initiative to promote the use of EVs to address both environmental and fossil fuel dependency. The RGoB thus requested the World Bank to provide a technical study to share global expertise and international experiences in planning and implementing EV initiatives in other countries. The World Bank welcomed this exciting opportunity to work with the Bhutanese government to conduct this study with the objective of informing the policy process and facili- tating evidence-based policy debate that tends to be surrounded by technology uncertainties and lack of comprehensive information.
The Bhutan Electric Vehicle Initiative • http://dx.doi.org/10.1596/978-1-4648-0741-1
The study team worked across conventional technical boundaries and adopted an integrated approach by establishing links…